Morning Preview: April 07, 2021

Early Look

Wednesday, April 7, 2021

Futures

Up/Down

%

Last

Dow

21.00

0.06%

33,336

S&P 500

2.25

0.05%

4,066

Nasdaq

7.50

0.05%

13,576

 

 

U.S. futures are looking flat to slightly higher, looking to rebound after the S&P 500 and Nasdaq Comp slid into the close late Tuesday, snapping 3-day win streaks, posting a modest pullback in a consolidation day after a quick run-up to start the month. Market participants await details of the Federal Reserve’s meeting in March in the form of FOMC Minutes later today, hoping to gauge the central bank’s outlook for the U.S. economy and seeking clues on when the Fed might next hike rates from record low levels. The S&P dipped -0.2% on Tuesday while the Dow fell -0.4% as the weakest performer. Market inflation concerns have eased over the last week as Treasury rates have slipped, with the 10-year yield dipping to around 1.64% (off recent 14-month highs of 1.78%). Sectors ended mixed yesterday as gains were led by defensive names (utilities and Consumer Staples), but volumes were light, as U.S. exchanges was below 10 billion shares for the first time this year, according to Bloomberg. In Asian markets, The Nikkei Index rose 34 points to 29,730, the Shanghai Index slipped -3 points to 3,479 and the Hang Seng Index dropped -263 points to 28,674. In Europe, the German DAX is little changed at 15,210, while the FTSE 100 is higher by 50 points to 6,875. Markets got a small sentiment boost late yesterday after California said it plans to lift most Covid restrictions June 15, keep mask mandate, according to Gov Newsom. With more than 20 million vaccines administered across the state, it is time to turn the page on our tier system and begin looking to fully reopen California’s economy, he said.

Market Closing Prices Yesterday

·     The S&P 500 Index slipped -3.97 points, or 0.10%, to 4,073.94

·     The Dow Jones Industrial Average fell -96.95 points, or 0.29%, to 33,430.24

·     The Nasdaq Composite dipped -7.21 points, or 0.05%, to 13,698.38

·     The Russell 2000 Index declined -5.73 points, or 0.25% to 2,259.15

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     10:30 AM ET      Weekly DOE Inventory Data

·     3:00 PM EST       Consumer Credit for February

 

Earnings Calendar:

·     Earnings Before the Open: LW, MSM, RPM, SCHN, SMPL

·     Earnings After the Close: LNDC, RGP

 

Other Key Events:

·     EnerCom 20201 Virtual Conference, 4/6-4/7

·     Piper Private MedTech Symposium (virtual), 4/6-4/7

·     China PPI, CPI data for March

 

 

Macro

Up/Down

Last

Nymex

0.46

59.79

Brent

0.54

63.28

Gold

-6.25

1,737.00

EUR/USD

0.0015

1.1891

JPY/USD

0.02

109.77

10-Year Note

-0.012

1.644%

 

 

Sector News Breakdown

Consumer

·     Cruise line stocks rose after hours (CCL, NCLH, RCL) after the CDC is reported to have said that cruises can start back up the middle part of this summer with restrictions, according to headlines

·     Li Auto (LI) to offer $750M in convertible senior notes due 2028

·     LGI Homes (LGIH) announced it closed 1,147 homes in March 2021, up from 795 homes closed in March 2020, representing year-over-year growth of 44.3%

 

Energy, Industrials and Materials

·     The American Petroleum Institute (API) reports that crude inventories fell 2.62M barrels last week and gasoline inventories rose 4.55M barrels, distillate inventories show a build of 2.81M barrels and Cushing inventories show a draw of 84K barrels

·     Laredo Petroleum Inc. (LPI) sees total production of 78.9 Mboe per day for three months ended march 31, 2021; sees oil production of 24.2 MBoed for three months ended march 31, 2021

·     Maxeon Solar Technologies (MAXN) posted Q4 adj EPS of $0.11 while saying elevated costs for glass, solar cells, freight and other items may persist well into H2 2021; guides for Q1 revenues of $160M, below the $232.7M estimate

·     MSC Industrial (MSM) Q2 adj EPS $1.03 vs. est. $1.03; Q2 revenue $774M vs. est. $779.78M

·     Renren (RENN) announced that Renren has made a $6M equity investment in Kaixin (KXIN) by subscribing Kaixin Auto Holdings’ newly designated convertible preferred shares

·     Royal Dutch Shell (RDSA) said it sees Q1 adj EPS to see a hit of up to $200M due to an extreme cold snap in Texas in the quarter; said it saw refined oil product sales at between 3.7 and 4.7 million barrels per day (bpd) for Q1

 

Financials

·     Coinbase announces Q1’21 estimated results and FY’21 outlook; verified users 56M; total Revenue ~ $1.8 billion; assets on Platform of $223 billion, representing 11.3%

·     Genworth Financial, Inc. (GNW) said it has exercised its right to terminate its $2.7 bln merger agreement with China Oceanwide Holdings Group Co., Ltd. as of April 6, 2021. Terminating the agreement allows Genworth to pursue its revised strategic plan without restrictions and without uncertainty regarding its ultimate ownership, which might impact the Company’s ability to successfully execute the plan

 

Healthcare

·     FibroGen (FGEN) shares fell -20%; provided clarification of certain prior disclosures of U.S. primary cardiovascular safety analyses from the Roxadustat Phase 3 program for the treatment of anemia of chronic kidney disease

·     Moderna (MRNA) covid-19 vaccine being rolled out in U.K. for first time; Moderna will be the third approved shot alongside AstraZeneca (AZN) and Pfizer-BioNTech (BNTX)

·     CA Healthcare Acquisition Corp (CAHC) rises over 20% after diagnostics testing co LumiraDx agrees to merge with blank-check firm CAHC and list on Nasdaq under ticker symbol (LMDX); the combination reflects a value of $5 bln for LumiraDx’s existing equity

·     CytoDyn (CYDY) said it signed an exclusive supply and distribution agreement with Biomm S.A. in Brazil, enabling Biomm to sell leronlimab in the region following regulatory clearance.

·     Ionis Pharmaceuticals Inc. (IONS) intends to offer $500.0 mln of convertible senior notes due 2026

·     Lilly (LLY) and Incyte (INCY) communicate review extension of supplemental new drug application for baricitinib for the treatment of moderate to severe atopic dermatitis; PDUFA extended three months to early Q3

·     NuVasive (NUVA) announced the NuVasive Simplify Cervical Artificial Disc received approval from the FDA for two-level cervical total disc replacement, or cTDR

·     Envista Holdings Corp. (NVST) will replace InterDigital Inc. (IDCC) in the S&P MidCap 400

·     Outset Medical Inc. (OM) files for offering of up to 5.0M shares of common stock

·     Phreesia (PHR) files to sell 4.5M shares of common stock

 

Technology, Media & Telecom

·     Samsung Electronics Co Ltd (SSNLF) said Q1 profit likely rose 44%, with analysts attributing the surge to brisk sales of smartphones and TVs, albeit tempered by a likely fall in chip earnings after a storm halted U.S. output; operating profit of 9.3 trillion won ($8.32 billion), matching a weighted average analyst forecast from Refinitiv

·     Everbridge, Inc. (EVBG) and xMatters announced that the two companies have signed a definitive agreement for Everbridge to acquire xMatters for a purchase price of approximately $240 million in cash and stock, pending regulatory review and other customary closing conditions

·     InterDigital (IDCC) removed from S&P MidCap 400 and will replace SEACOR Holdings Inc. (CKH) in the S&P SmallCap 600 effective prior to the opening of trading on Monday, April 12. American Industrial Partners is acquiring SEACOR Holdings in a deal expected to be completed soon pending final closing conditions

·     Smart Global (SGH) Q2 EPS 87c vs. est. 80c; Q2 revenue $304.0M vs. est. $295.38M; sees Q3 EPS $1.00-$1.20 topping est. 90c and sees Q3 revenue $400M-$430M above consensus $314.01M; adjusted Q2 EBITDA of $31.0M, up 38.9% compared to the year ago quarter

·     Himax Technologies (HIMX) reports prelim Q1 revs of $309M, topping the $184.9M Refinitiv estimate; said for Q2, the demands remain robust and the global semiconductor shortage has not shown signs of receding

·     Mobile app and gaming company AppLovin Corp, which is backed by private equity giant $KKR, said on Wednesday it was targeting a valuation of more than $30 billion in its U.S. initial public offering (IPO). The company said it was looking to raise as much as $2.13 billion in its IPO by selling 25 million shares at a price range of $75 to $85 per share – Reuters

·     United Microelectronics (UMC) reports March net sales grew 14.06% YoY to NT$16.62B; YTD sales up 11.43% YoY to NT$47.1B

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.